Exclusive: AFSCME Council 5 experiencing financial woes, membership decline, documents reveal

AFSCME Council 5, headquartered in South St. Paul, is facing a $1 million budget deficit and dwindling membership enrollment. Photo by Ricardo Lopez/Minnesota Reformer

The abrupt departure of two top leaders this past summer were just the beginning of troubles for one of the state’s largest and most powerful public sector unions, American Federation of State, County and Municipal Employees Council 5. 

Documents obtained by the Minnesota Reformer show that Julie Blehyl, the recently named executive director of the union, inherited a $1 million deficit out of a total $13.6 million budget — the result of dwindling membership. 

The documents also revealed the surprise discovery of more than 240 outstanding arbitration cases. Those are instances in which the union is supposed to represent its members — typically state, county and city workers — who have grievances or face potential discipline or termination from their employer governments. 

The full extent of the massive backlog had been concealed from the union’s executive board.

“The board had been told by the previous associate director Tim Henderson that we were caught up on arbitrations this summer,” then-interim director Blehyl wrote to the board last November. The union began to train all staff in how to conduct arbitrations in an effort to quickly reduce the backlog. 

The union leadership does not dispute the authenticity of the documents, which paint a portrait of a flagging organization trying to move past the turmoil sparked after its previous top leaders were accused of creating a hostile work environment; staff last summer complained of racist and sexist treatment. The documents also show the union is desperately trying to increase the number of dues-paying members to shore up its budget or face “serious budget issues down the road.” 

Council 5 leadership in a statement acknowledged its fiscal woes and said they are taking the budget situation seriously.

“We are committed to ensuring our budget outlook is realistic, justified, and solely focused on providing excellent services for all of our members and the public,” Bleyhl said in the statement to Minnesota Reformer. “We have undertaken significant changes under my leadership in order to unite and grow our union in order for working families to have a strong voice in their workplaces and communities.”

The upheaval comes just two years after the retirement of Eliot Seide, who was known for guiding AFSCME locals through a merger and then turning the resulting outfit into one of the most influential and respected public sector unions in Minnesota. 

Seide’s successor was John Westmoreland, whose deputy Henderson resigned after an investigation of racial harassment. Those harassment allegations were in addition to the other accusations of a hostile workplace outlined in an August letter by a former union organizer.

Westmoreland did not return a phone message, and efforts to reach Henderson were not successful. 

Asked what actions the union has taken to address the racial and gender harassment complaints since the departure of Henderson and Westmoreland, Blehyl said in a statement that under her leadership, “Council 5 is forward-looking and trying to not rehash old accusations that have already been addressed.”

Although it’s unclear why the union failed to keep up with the arbitration backlog, the documents show that the union’s most pressing concern is the large deficit it faces amid dwindling enrollment, even as it enters a crucial political season. 

Union membership has plummeted following a 2018 Janus v. AFSCME U.S Supreme Court decision, which ruled nonunion members cannot be forced to pay so-called fair share fees to a union that represents them. Before Janus, such dues could be collected from non-members as long as they were used only for the purposes of collective bargaining, contract administration and grievances — not political activity. 

The Janus decision allowed members to drop their membership and not have to worry about paying any fees, which created a financial incentive to do so.

According to union documents, Council 5, which represents a diverse range of occupations throughout the state, including corrections officers, social workers, clerical workers and snowplow drivers, has more than 44,000 workers covered by its contracts. But AFSCME Council 5 counts fewer than 33,000 dues-paying members, roughly 75%. To shore up its budget, Council 5 leaders have to recruit thousands more workers to reach their goal of nearly 38,000 dues-paying members, documents show. 

The union first experienced a budget deficit in 2019 because of overly-optimistic membership projections, according to the documents. Despite a previous $5 fee hike instituted under Seide, the union faces financial headwinds that threaten to hobble their political activity and membership recruitment efforts. 

“It was noted that the increased dues … has allowed us to weather the post-Janus situation, but we must turn the numbers around, or we will be facing serious budgetary issues down the road,” Blehyl warned in her November budget presentation. 

In recent months, the union has continued working to reduce the number of outstanding arbitrations. 

“As a result of the number of unassigned and open cases, we as a union quickly pulled together and I directed that all Council 5 staff work aggressively to thoroughly investigate these cases and provide ongoing training for staff and members on the arbitration process,” Blehyl said in a statement to the Reformer

Budget woes going into a big election year

AFSCME Council 5 has outlined an aggressive plan to recruit more members as well as spend heavily on political activity this year, budget documents show. With all 201 seats of the Legislature up for election in November, the union is working hard to help Democrats regain their majority in the Senate and retain the DFL-controlled house. 

The union is a constant presence at the State Capitol and a close ally of DFL lawmakers and Gov. Tim Walz. 

The union is instituting some budget-saving measures, including no longer providing hot meals at weekly staff meetings, supplying snacks instead. Staff have also looked at cutting expensive vendors to reduce food costs. Additionally, no directors or staff will be allowed to make financial commitments on behalf of Council 5 without Blehyl’s authorization. 

The 2020 budget also calls for dipping into the union’s “substantial” reserves, the documents showed. 

“We need to hold ourselves accountable and determine concrete plans for raising membership in order to raise revenue,” according to Blehyl’s November report. 

The belt-tightening is no guarantee the union’s financial picture won’t worsen given the reduced projections for membership. Heading into 2021, the union “will be dealing with the reality of Janus and the possibilities of people dropping during their open window,” according to the November budget presentation. 

The budget discussion ended with an edict to staff to carefully vet its spending: “As we move ahead, every check going out of the office has to answer the question, ‘what does this do for our membership?’”

Ricardo Lopez
Ricardo Lopez is the senior political reporter for the Reformer. Ricardo is not new to Minnesota politics, previously reporting on the Dayton administration and statehouse for The Star Tribune from 2014 to 2017, and the Republican National Convention in 2016. Previously, he was a staff writer at The Los Angeles Times covering the California economy. He's a Las Vegas native who has adopted Minnesota as his home state. In his spare time, he likes to run, cook and volunteer with Save-a-Bull, a Minneapolis dog rescue group.